“Traditionally, customers have focused on acquisition. When money was a little cheaper, it was easy to throw money at the problem and grow at all costs. But, what we’ve found over the last year – in a real painful way – is that it’s no longer working.” – Chris Dishman, Senior Vice President of Customer Success, Totango + Catalyst
For years, SaaS leaders thought new customer acquisition was the fastest way to grow. However, the data doesn’t bear that out—indeed, the majority of high-growth companies get the majority of their growth from existing customers via expansion and cross-selling. The concept of customer-led growth has been quietly going on for years, but shifting economic forces brought this truth to light.
As a result, this business shift reveals the increasingly significant role that an exceptional customer success motion plays in protecting and expanding revenue for sustainable growth.
In a recent episode of the B2B Agility podcast, Totango + Catalyst’s Senior Vice President of Global Customer Success, Chris Dishman shares his insights on key customer success topics:
- How customer success teams can create and demonstrate critical business value to the C-suite
- What it means to be a compelling force to align the entire organization around a customer-first strategy
- Why vanity metrics might feel good at first, but end in pain for everyone
Here are a few highlights from this discussion and check out the full podcast to get Chris’ complete perspective on how to pivot your organization to activate customer-led growth.
Plan for the long-term, act in the near-term
Customer-led growth (CLG) is the implementation of operational practices that align go-to-market strategies with customer needs and business outcomes. It emphasizes protecting and growing revenue from the customer base providing a durable strategy for growth and profitability.
The catch: to be successful, it has to be executed across the entire organization – not just the customer success team.
“Customer-led growth is not something that is achieved just by your customer success management team,” Chris explained. “You’ve got to incorporate CS, you have to make sure that you have sales aligned with CS, CS aligned with sales and marketing, marketing and product need to be in sync with each other. The goals and the initiatives that you have across the board need to be really in sync and lock step in order to have a solid and efficient motion that’s going to get the most out of growing your customer base.”
Drive synergy with a universal mindset shift across the go-to-market team
A common hurdle organizations face when trying to pivot to a customer-led growth strategy is siloed processes across the core go-to-market team, including sales, marketing, and customer success.
It’s crucial to remember: One function is not more important than the other—it’s a mindset shift that begins at the very first touch point pre-sale with a potential customer.
“As an overarching company, you need to be aligned on the fact that your primary focus is making sure that your customers are well taken care of, making sure that they’re healthy, and that they’re primed for growth,” Chris said. “It’s not so much pre-sales and post-sales; it’s… a strategy that takes the customer from end to end.”
Avoid vanity metrics, and measure true customer outcomes
Measuring business metrics like net revenue retention (NRR) and gross revenue retention (GRR) are important, but identifying and tracking customer outcomes is the true north star for customer success and customer retention.
Quick tip: If you can’t track a customer outcome value in real-time, identify a proxy metric that you can track and that allows you to make informed decisions quickly.
“Start with the endgame in mind by making sure you have a very clear, measurable outcome for your customer and why they purchased your product or software in the first place and then being able to ask what the baseline is for that and where it is today,” Chris explained. “This is a measurement where you can say ‘We achieved these outcomes or we’re 80% towards our goal with this specific outcome.’
Fuel a customer-led growth mindset to power sustainable growth
Shifting to a customer-led growth strategy is not about just changing tactics. It’s an evolution—or more likely a transformation—in the entire organizational mindset and philosophy resulting in new practices and tactics to prioritize and nurture customer relationships for the long-term.
Working with hundreds of leading B2B and SaaS enterprises, Chris shares a best-in-class perspective (and a handful of hot takes!) on this pivotal topic in the full podcast discussion. Totango and Catalyst have addressed the CLG need with a Customer Growth Platform (CGP), optimizing every customer interaction for improved retention and revenue, learn more about the capabilities here.
